246. "We’re drowning in debt, but bought another house"

- 924,000. - How's it feel to you to be in debt?

“- It feels like we're never gonna get out of it.”

- Don't need to get in one or by another property. 'Cause he doesn't like real estate investments that much. I was like, "No, let's buy this shirt too." And then we bought it. - It feels like I live paycheck to paycheck.

I don't feel like I'm making any money. - I can't even figure out what page anybody's on right now. - It's like a kid wanting to buy a toy. - I want this toy? No, I want that toy.

You're talking about a million plus dollars here.

- I feel like I'm in the roller coaster again. I'm trying to see what he's gonna say next. - If we end this call right now, I suspect you will go the rest of your life. Getting into debt, making a little bit of money over here,

paying it off, going into debt, doing it over and over until one day it's like you're in the ocean and it just engulfs you. Do you know anybody who's done that? - Like mine?

- Bae loves their houses 50. - And now you're both repeating the same pattern. Today I'm speaking with Melissa and Tony, a couple who immigrated from Mexico to the U.S. in their early 20s. They didn't have a lot of money,

but they were willing to work long hours to build a successful life together. And it works. Eight years later, they built a net worth of nearly $900,000.

So unless in a decade, they're almost millionaires on paper. But beneath their paper wealth, Melissa and Tony are overwhelmed. They're carrying massive real estate debt and they are misaligned on their financial goals.

And with their second child do any day now,

they really need to get all of their houses in order. That's right, they currently own three properties. I'm gonna pull up their conscious spending plan, which is the exact system I use to see how someone earns, spends, saves and invest.

If you want help navigating your own CSP, join my money coaching program at iwt.com/moneycoaching. Here's where they stand. Assets $1.58 million. Investments $190,000, savings $30,000,

debt $899,000, net worth $899,000, fixed cost 68%, investments zero, savings 23% and guilt-free spending, 9%. You can see how much has revealed once you look beneath those top line numbers.

Like from the outside, it might look like they are building serious wealth. But under the surface, they have created a system with very little safety net. No investments, very little cash.

Basically, no room for air.

So today I wanna know can Melissa and Tony stop chasing the next deal and start building a sustainable rich life. Let's find out. Melissa, in your application,

you wrote something that caught my eye. You said, "Our new baby will be born this month." I would like my husband to understand financials, set up a plan with me and act on it, not just ignore the fact that we have debt

and keep spending. Do you remember where you were,

“what you were doing when you wrote those words to me?”

- It was a month ago, and it was like a throwback from my first pregnancy when I had my first child, I still working for two months. So Tony was coming to me and saying like, "Mail, what are we gonna do with supply?"

And it was like, "Oh my God, I cannot think about that." - You said that the baby's gonna be born this month, right? - Yes, I'm very nervous, very nervous. - Oh my gosh. Okay, wait, so do you have a plan for your finances right now?

- No, I don't think we have a plan, because everything is up in the air. We either have some investments, but we don't know what to put it. We don't have an emergency fund,

because we had debt and we don't know what to pay our first. So it's been really hard to set up a plan, and really follow-through. Sometimes Tony's like a roller coaster. Like, sometimes he's like, "That's a great idea."

And then next week, he's like, "That's a terrible idea." So it makes me feel like, can we just set up a plan and just follow-through? - How long has this been an issue between the two of you that you don't see money the same way?

- I think since we got married, we have a very hard start. My parents got divorced, so then I took care of my three brother siblings. So all this sort and like,

we had to grow up and just be like in survival mode for everybody. So then he was like, from being just girlfriend boyfriend, to be like parents of my siblings.

“And I think that's what the problem started.”

- Okay. Tony, do you agree that you and Melissa have not been on the same page with money since you got together? - Yeah, I think that we kind of have

not be like a married couple, I guess. Everybody was like on their own with their finances. - How long have you been married seven years?

or talk about money together? - Yes, my siblings were at my house. So I felt like I didn't want him to be like the dad, but it was hard for me because it was like, I want him to be my husband,

but also I want him to be the dad of my siblings. So I didn't want to put that responsibility on him,

“but still I think that he was affecting us,”

putting together like a plan. Now they're outside the house. He was very hard time, so it was like six years or five. - Five, six years of taking care of them, you taking care of them.

I want to know a little bit more about that. So first, I need to ask a few more questions about your money. If that's okay, I understand that you're in debt. How's it feel to you to be in debt?

- It feels like we're never gonna get out of it.

- Did you know how much debt you were in, Tony? - Yeah, I was kind of looking to the credit cards and I'm always kind of like on top of the numbers. - Wait, you're on top of the numbers, but you're in debt?

Why? That doesn't mean you're on top of the numbers. - Well, I guess I know how much money I have. That's what I mean. - All right, how long have you been in debt?

- Since 2023? - Okay, a couple of years. What about before then? - Not debt at all. - Oh, we just had money too.

Invest or, but as a down payment for a new house or. - Okay, so you had extra money before two years ago,

“what happened two years ago that put you into debt?”

- We thought that it was gonna be a good idea to build the house? - Okay, our dream home. - And then we bought the lot in Cabo at the same time. - You were building a house and you bought a lot

in Cabo at the same time. - Yeah, and then we were a bit budget on the house. - How many properties do you own now, too? - And the lot didn't come off. But it's under contract, so hopefully you'll close.

- So you own one house, the one that you live in, you own another house, did you rent that out? - Yes. - Okay, and then you have the lot which sounds like you're trying to sell right now?

- Yes. - Okay, all right. I wanna jump in here quickly to acknowledge there are a lot of confusing layers here. So let me just cut through the noise.

Here's what you need to know.

Melissa and Tony have not created a shared system for their money. As Melissa explained, she and Tony became responsible for her three siblings after her parents divorced.

And so they were thrust into this parental role before they were able to make that decision for themselves. Now keep in mind, this all happened shortly after they immigrated to the U.S. So they were suddenly caring for three teenage kids

while also navigating a completely different culture with language barriers and a new marriage.

“I want you to remember that because if you were thrust”

into a new country with different cultural norms and expectations, having to suddenly take care of three teenagers, how would you handle it? I remember in my 20s when I was getting ready to move from San Francisco to New York, I was worried.

I was like, how do I find somebody to cut my hair? And I'm an able-bodied, educated guy and just the idea of finding new people to cut my hair or places to eat that felt overwhelming. Now imagine moving to a different country

and having to figure out everything for the first time. She had her young siblings to take care of, where do they go to school? How do you shop for groceries when you don't know the language that well?

How do you fill out forms to get healthcare in America? Damn, it's hard enough for Americans even understand what a deductible is. Now imagine you're doing that in a second language. On top of that, when they immigrated,

like many of us, they never took the time

to have a series of conversations around their money. And now they're expecting their second child in just a few weeks and they're panicking about paying down hundreds of thousands of dollars of debt, which they largely built up

because of their decision to purchase a bunch of real estate. So far, they've mentioned owning two homes, one which they rent out plus an undeveloped lot in Kabul. This actually sounds like a lot of people's American dream. Let's keep going.

Tell me a little bit more exactly how did you get into debt? Well, I think we got into debt pretty quickly because when we first started building our dream home, everything went out of our budget. Melissa is an architect, so she likes to design

and do cool things with the house, so. But it was right after COVID when the lumber was like three times more and things like that. All right, so you got into debt,

you had the mortgage, what else? The $80,000 suburb budget. 80, okay. Not only that, we also had two new vehicles. Why did you do that?

Well, first we needed an SUV before a kid. Oh, no, no, no, no, no, no. We have to do this. You have a little baby. How old was your kid when you bought the SUV?

It was about to be born. Okay, so we have a not yet born baby.

When you need a new SUV, why?

Finish the sentence, please. So we get all fit for the kids. This little baby, that is what? What do I even have in my room? That's the size of a baby.

I have nothing. This little baby needs an SUV. Okay, what kind of SUV did you get? It was a three row Kia. Oh, no.

I spoke to another couple that spent $62,000 on a Kia SUV. How much was yours? It was a lease. How much per month? 500?

500 a month. Okay, and then you had another car.

And then we had a truck, because since she works in construction, we needed a truck

for supplies and stuff. All right, you still have the truck? We sold both of it with the loss and we paid a car cash. So that's what we share the car now. This one does one car.

Okay, I liked that. I did not expect that. What kind of car did you get? We have a 2018 expedition. Ford Expedition?

Yes. All right. I'm pleasantly surprised. You took the loss and sold the car. Most people find that very difficult.

All right. So you had a bunch of debt. Let's go back to the debt. How much debt did you rack up in 2023? Like 140,000.

How about the mortgages, the loans, all that? All the mortgage was 540, 540 plus 140. Starting to add up here, what else? I think that's all.

“Was there a point where you were like, this is too much?”

Like, something is wrong here. Yes, because at that time, I lost my job. So then we're like, well, we are in a real mess. I had to steal like three more projects to finish through my company. So I finished those, then I got some cash, we paid off half of the 80,000.

So then we just did like a payment plan with MX for the remaining 40. Okay. And then I found a job and then I saved like 50,000. And now we are like, should we sell that house?

Because it's worth like a million, a million, 100 and our mortgage is only 540.

Okay. This is going to be the shortest call on the planet. But in debt, we have a house that's worth a lot of money. Should we sell it? Yeah, I guess, yes.

I know I'm supposed to like, understand more, I want to ask you a lot of questions. But like, did we just find the answer here? Like, why would you not sell a house when you owe all this money in debt? Or vision was to leave older with rentals and things like that. One cousin, we have those that.

One cousin. Okay. You have a cousin who bought a bunch of houses and rents them out. Yeah.

“Do you notice that they contradict each other and they contradict themselves?”

For example, Tony said they went over budget on building their dream home because of Melissa's architectural design. But then Melissa said, well, actually it's because lumber was more expensive during COVID. Melissa says, maybe we should sell this house. And in the next breath, our vision is to retire with a bunch of rental properties.

It's very confusing, it's very contradictory. Watch as I asked them about how they decided to purchase their last property. You're going to see that they go back and forth. What do you notice in this exchange? Let's talk about the conversation regarding the latest property.

So Tony didn't want to buy another property, of course, because he doesn't like real estate investments that much, stressing out. But I felt like if we were to sell that house, I didn't want to be just like without any property at all. And to kids and their rents were very expensive here in Florida.

So then I was like, Tony, we're going to sell the house. I want another house and he's like, no, we don't even know if he's going to sell. He's a pessimist, like negative. So then I was like, no, let's buy this short to because he was like $60,000, $70,000. Leza and a actual value.

And now it's like Tony's close to work. It's a smaller. It's a lot smaller. But I was like, we don't need more and then we bought it. So you said, we have this one house.

I want to get another house. He said, no, and then you said, no, we're going to do it anyway. And then you bought the house. Well, he said, it was a good idea. And then next week, it's a bad idea.

And then following we was like, no, I think it's a good idea.

“So that's what I mean when it's like, are we doing it or not?”

I don't know. I see. Tony, is that true? You go back and forth with your opinion? At the beginning, I didn't want to do it.

But then I guess she convinced me. We should get this new house and just rent the other one out. And the original thing was that it was closer to our work.

So wait, how does that?

I'm trying to understand.

What kind of food do you guys hate? I hate French. I don't like cheese. Oh, you hate all French food? Yeah.

My man. Indiana is not like French food either. It's too bland for us. Freaking rose married. That's not the spice.

All right. So let me put it this way. Hey, Tony. Let's go spend $65,000 on a French meal. You're like, no, that's so horrible.

But Tony, it's close to your work. Would you do it? No.

“So how come you got this house just because it's close to your work?”

Because I wanted to make her happy. Oh. So did it work? She's pretty happy, but now we're stressed because we don't, we have too much debt. Okay, what's happening right now in this conversation?

Does anyone feel like the energy is a little weird? Am I the only one? I feel like I'm in the roller coaster again trying to see what he's going to say next. Why do you feel that way?

Because we talked about this, now he's saying he never wanted to buy it.

But I feel like sometimes he doesn't say or set up a plan so he doesn't get the blame. He's like, you decided that so then he's not taking their responsibility off. No, I said no and then I said yes and we're in this mess together. I see. Okay.

That's an interesting theory. Tony, you think that's true? I don't know if this, I can't really say if this was a good idea or not to buy this house because we haven't sold it and we haven't made any money on it. How much debt are you guys in right now?

105,000. Oh, no. I mean, 924,000. And including the mortgages.

“Why did you just give me two different numbers that are almost a million dollars apart?”

Because I don't count the mortgages. Why? A mortgage is debt. It's literally debt. I know.

What's happening right now? Why do you not count a mortgage is debt? Because in her mind we're going to make profit. Is that true? Yeah, because I wanted to sell the other house in next year.

I don't think you guys are on the same page with money. I can't even figure out what page anybody's on right now. Like, was it a good idea or not a good idea? It's very unclear. Do you have debt?

Might be 105k, might be 824k. Don't know. Did one person agree? Not sure. It's all very confusing to me.

Do you feel the same way? Yes. I think we contradict each other's. Yes. And I think sometimes you both contradict yourselves as well.

Yeah. Why do you think you do that? Like, we don't have a, like I real concept of why we're doing. Yeah. We want to do a shift.

“That's why I think we're here because there's other types of investments and we want”

to get out of real estate because it's not liquid at all. So it's just makes us go this round of debt. So we want to stop. Is that true? You want to stop being involved in real estate?

I want to. Yeah. Okay. And Tony? Yes.

Oh. Why don't you say that at the beginning? We've knocked this out in 15 minutes. Is it true? You really want to be out of real estate because you just told me five minutes ago.

We don't want to be without a house. We need a house for the kids and on and on and on. Well, I think at least we want to own a home. That's why we bought this small house. Okay.

So because we don't, we don't want to retire here in the United States. But at least I think we need a physical address in case something happens. We can always come back. But like we don't have to have like, for properties or three properties. I would like to have one house and be paid off.

Okay. That's my goal. That sounds pretty similar. The two of you seem like that goal could work together, right? They say they want the same thing, one house and to pay off debt.

But agreeing on that outcome doesn't actually mean they're on the same page. I'm picking up on some big clues.

Like here's what I noticed.

Earlier Tony told me he's quote always on top of the numbers. That sounds responsible. And in my opinion, all he's really doing is monitoring problems, not solving them. Just knowing your debt balance doesn't mean you're managing your money. That's like someone who knows that their body fat percentage is high.

They've got their lab results, they track it every week. But they're still eating at dairy queen four times a week. Yeah, you might be aware, but that doesn't mean you are making changes. And then there's Melissa. She said their goal is to retire with rental income.

And I asked her why she said, my cousin does it. She's following someone else's playbook without really knowing the rules. And I see this constantly, especially in immigrant families. In fact, it happened in mind. My dad was set to study petroleum engineering.

He got into a great school, days before leaving, a random family friend stopped by for dinner

My dad told him, and the guy goes, not a good field. There aren't that many jobs you shouldn't do it. So my dad changed everything. He changed his major. He didn't even go to that school.

And he became a mechanical engineer instead. He made a life-changing decision because of one off-hand opinion from a guy at dinner. Even he admits, I don't know why I did that. But this is how so many major decisions get made. Real estate, careers, college, even marriage.

From random comments we hear from people that we trust, often without interrogating. If their opinion is right for us. I'm curious, in the comments below, have you ever made a major life decision because of what somebody else said to you, leave a comment below, I want to read it. When we come back, I want to dig into why Melissa and Tony are so emotionally attached

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Let's take it back a little bit.

“Why did you initially decide to buy and sell houses?”

Because we are in a growing area, so we bought a load for 7,000, and I knew we could sell that.

I'm built a house and sell it for a million, so let's do it.

How did you know that? Well, I'm a realtor and architect and a gc, so that's my work. Okay. Oh, that's good. All right.

So you saw an opportunity, and did you tell me the numbers correctly? You can buy it for 70K and sell it for a million? With a house in the land.

So the land was 70, the construction by 140,000,000,000,000 over budget, it was. Okay. Let's just say 700 to round up and have you sold it yet? No, because we need to wait for 2,000,000,000,000,000,000,000. What's the market looking like over there?

“It's going down, so that's why I think I'm million.”

Okay. But you can't sell it until next year. If we want the capital gain tax of the 500,000. So that's why you originally got into buying and selling houses because you said, "I see an opportunity.

I'm a realtor, I'm a gc, I'm an architect, I can make this thing happen, bought the house, put money into it, several hundred thousand dollars. You're constrained right now because you can't sell it.

But hopefully you can sell it for about a million bucks next year.

If you sell it for a million, what will your profit be? Probably like 400,000, 350. 350. Okay. When did you buy this, $70,000 a lot?

Oh, in 2022. So four years for maybe like 300, 350, 400,000 dollars of profit. Yes. Okay. Melissa, you mentioned earlier that you want Tony to take action around your debt.

What do you mean by that? I feel like he feels like I'm the one renovating and building, and so it's my responsibility to cover and set up a plan for it, or when the profits come, then it's or money. Oh. So I feel like no, it's or plan, like that's why I feel like he rather doesn't say anything,

so he doesn't get the blame, but if things go right, then it's like, "Oh, great. You're so smart." But he's like, "You are also in this." But I think sometimes he's scared that if he does something wrong, I would be just blaming him or something.

What do you think, Tony?

I'm more of a, I'm always like a fear of what's going to happen, like if I'm always

more of a negative side, like for example, the house, I mean, what happens if it doesn't happen if we lose it all, and she's more of a risk taker. So how do you fix it? With the plan together and talk about it, and just have a plan, what's the plan? Not do any more risky investments.

What do you say, Melissa?

“Yes, I think that's why when I lost my job, I was like, "Okay, I don't want anything”

of these silly little." that's why we started selling the houses on the land. And did they sell? Yeah, the first house sold for five days. How much did you make on that? $280,000.

Okay. That's good. What'd you do with the money? I think we did some mistakes because we bought the land in Kabul. She took all the money and put it into another piece of land.

From the $280, $120 went to the land. What about the rest? We owe a Tony's mother $30,000, and then we invested in childhood for the first time. And then the nine months I didn't work, then we just, just some of the money. And also when we returned to vehicles, we had to pay the negative equity.

And we bought the car cash. Do you notice the cycle that you're in? Yes, what is it? Make money, then pay off debt, and then figure another way of how to make money. What about you, Melissa?

What do you notice about the cycle that you're in? Yes, big purchases, big expenses. And like $280,000, a lot of money to make. But where is it? Did it help you get ahead?

Kind of, a little. You have this land. But like, what do I get? All this work, all this time, all this risky took. Where is it?

Yeah, I think we jumped from one project to the other and then the other project, and he's like, to soon we don't let even the money grow. Yes, why do you do that? Except for them, we're running out of time. That's a very common thing.

Whenever people say that, they almost always make really bad decisions.

They'll say either we're running out of time, or I feel like we're behind. And then they immediately start making really, really ultra risky decisions. But when you ask them, running out of time for what? What are you basing that on? They really have no idea.

Do you enjoy the cycle that you're in? No, that's why I want to change. Tony? No, not at all. I mean, original plan was to retire by the age of 50.

Oh, you're running out of time for an arbitrary deadline that you set. That's like me saying I'm running out of time to fly to space.

“And then you go, what, when do you need to go back to 45 years old?”

Why 45? I don't know. Just 45. I'm running out of time.

Can we do an example conversation, like a role play between the two of you, on what your

“last conversation about paying off your debt, went like?”

Who was the one who started the conversation? I think it was me. Okay. Go ahead. Just as if you're having the conversation, I'll just observe.

Have that conversation again so I can listen, please. So Mel, I think that when we are able to sell the house, that it's worth a million dollars, if it sells, I'm not sure if it's going to sell for that much. We should take the profits and pay off our current home where we live. And the rest is put into our retirement account, put it into our kids, 529 plans, which

we haven't done yet and just keep working and saving money and try to avoid any more debt and also pay it to credit cards. So you're really saying we should spend 180 paying off the house?

Yeah, because we're always going to be in the cycle with the money and we're going to end

up with not such a good investment and that we'll lose it all or it's finally going to be very bad for our family. I don't want to be worried about how we're going to make. What happens if you lose your job like what happened the first time? And I'm the only one paying all the bills, you know, we can't afford the lifestyle that

we live. I think we should sit down and explore all the options. Hold on. Does that have a conversation really goes? Yes.

Yes. Really? And then what happens?

“I mean, I think we'd never follow up on be like, were all or options and what's best?”

Why don't you follow up? She thinks it's just words and now we're not going to, or at least I'm not going to follow through. I don't know, maybe she doesn't believe I can do it. Do you trust Melissa that Tony will follow through?

Yes. I just feel like if we don't have savings either because we paid off a house, then I think we need to find something in the middle. I don't believe you right now. You're telling me that you both have this very pleasant conversation, and you agree, let's

sit down, and then you just don't sit down. Why? I think that is because then when I'm ready, like, okay, let's sit down. We just get distracted or with what? The key?

Maybe we just try to avoid the conversation and let's see what happens. Isn't one of the things you told me both today, you said you want to plan? Yes. Both of you said we want to plan that we can follow through. You've been married for seven years.

You never made a plan about money, right?

No. So I don't think it's your kid that's distracting you. You all make a lot of money. You get higher, babysitter for an hour or two. There's a lot of ways to do it.

I'm finding a hard to believe that you haven't had time to sit down for a couple of hours and make a plan. What's really behind it? When we sit down, I feel like we go in circles like again and again. Yes.

I feel like that's happening right now. I want to try to understand, like, how much debt? Who wants the debt?

“Do you both want to change or do one of you want to keep it this way?”

And I'm still not sure what's going on here. Do you guys want to get real with me? Yes. Who wants to lay out what's going on right now? Put it all out on the table for me.

Your plan is to settle down, not make any risk key investments, not have all the debt that we are accumulating and just focus on our kids and our retirement. I want that too. Okay. Where do you disagree?

So far sounds good. Sounds like you both agree. Well, we disagree because it's hard for us for me to convince her that it's the best idea to sell the house, get the profits and pay off our mortgage and just live in one house. Okay.

Can we build more of our savings too? Yeah. Whatever's left, we're going to start with playing over home and another car. I think we're okay with one car because our jobs are very close to each other and I don't see a way of us getting ahead of we pay another vehicle.

I feel we need to be a good. I mean, so far, it's probably one of the best decisions we have done is to not have any debt as far as the cars and just share a vehicle for the last six months that's like the best thing we have done but we can discuss that we will have more money to talk about. Yeah, I just feel like with an emergency if we want car breaks then we need.

It could be a cheap car. Okay. So how did that conversation compare to the normal conversations you have about money?

Most of your conversations you don't make a decision by the end do you?

No.

“So did you make a decision in that conversation you just had?”

Yes. What was the conclusion? They have the house and probably buy another car, a cheap car. A cheap car. Okay.

You both agree on that? Yes. If he doesn't change in mind next week. Why would he change his mind next week? Because sometimes he does, he then says like, "Actually, we're good with one car or things

like that." And then I'm like, "But we just decided that it was a good idea to have two cars. So that's what I mean with that roller coaster." That can't feel good. You know, you thought you agreed on something and then a week later your partner is changing

his mind. But ask a question, this is a major decision with hundreds of thousands of dollars at stake. How did you just make that decision? I think we try to run the numbers on our minds. If everything goes well.

Come on, nobody ran the numbers just now. Can anyone tell me one number you ran? No. There was not one number in that conversation. Did you notice?

I think you both just decided randomly. I feel this, no, I feel that, okay, fine, we'll sell the house and pay off this. But I want a car, I don't know about the car, I know I really want a car, okay, fine, we'll get a car. Is that not how you pretty much made the decision just now?

Yes.

“Do you think maybe that's how you've made a lot of decisions in the past?”

We're going to buy a house, we're going to buy land, we're going to sell a house, we're over budget. Like, this is what I think, this is what I feel and then try to convince my partner. What do you think? Is that some familiar?

Yes. Other people make big decisions like this, I really don't know. No. Okay. Melissa?

Well, I think they run the numbers and really analyze everything and all the different possibilities. When was the last time that two of you did that? When we said down to do the CSP, okay, what about before that?

Before that we never really did it.

Thank you. So here we have a couple who owns multiple properties, is in hundreds of thousands of dollars of debt, has never run the numbers. Melissa, you've heard this podcast before, right? Yes.

You heard me say run the numbers like a thousand times? Yes. What did you think when I was saying it? To really sit down, understand where you are right now. Okay.

But you didn't do that. How come? I think we're really never sit down. Guys, can I tell you something straight? You've got to stop saying this phrase, sit down.

We're all literally sitting down right now. What does it mean? We're not sitting down. Tell me what that means. Both putting our 100% attention into it.

I feel like that's not even happening right now. We're talking about what? $500,000 or something. Like a lot of money. This is a lot of money.

You worked really hard for it. And the way that you're talking about what to do with it is just like, oh, I think we should do that. No, I think we should do that. All right, I'll do this.

You do that. Okay, cool. There's not a single number being used. Do you see how that is probably what got you into this financial situation that you're in?

The way that other couples would make this decision is they would know their numbers. They would have a CSP. They would know their interest rates. They would know what is our strategy. Are we trying to build three houses?

How much do we have for a budget? Why are we using real estate as an investment? And they would be very, very careful to know when we buy this house, this is how much you plan to sell it for. If we sell it for more, this is what we're going to do with the money.

If we sell it for less, we're going to do this with the money. Right now the way you're talking about is just like, it's like a kid wanting to buy a toy. I want this toy. No, I want that toy. Okay, like, I'll get this toy you get that toy.

You're talking about a million plus dollars here.

We need to be talking about it in a very different way. Most of the time, I don't care if someone makes a different financial decision than I would. You want to go buy a house instead of renting? All right, as long as you ran the numbers. You want to go to a French restaurant, spend $55 on Poulet.

All it has is on top of it is black pepper. All right, fine. We're just not going to eat together. What drives me crazy though is when people make decisions out of fear. Like take the SUV example.

People love to say, well, of course we needed an SUV. We had kids. But is that really the reason? Deep down, are they thinking, well, I've carefully maximized safety of the family, as well as convenience.

I ran several split analyses.

“No, a lot of times we are thinking, that's what other people do.”

And what will people think of us if we don't have the biggest safest car as well? When you make decisions based on only what other people are doing, when you are constantly

for you. And that's a problem because money is a long game. If you don't learn how to make the right decisions for your vision, for your relationship

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That's 10% off and free shipping at trustandwill.com/remeat. What was it like to go through the CSP? Well, I think it was a very surprising that we made good money, but I frankly never, I don't feel like I'm making anything at all. I'm Alyssa.

We realized we had more investments that we thought. We also had multiple bank accounts, so then we consolidated that into one bank, so that was good, because then we could see how much more savings we have and how much debt to. So it helped us because at least we paid off $28,000 in the last couple of weeks. That's great.

So it was like a good starting point. Yeah, that's great. Did you both do the CSP together? Yes. Okay.

All right, let's take a look on screen here. Probably it's a little messy, because. Okay, whoa. What? So I'm going to describe what I see on screen.

I see a lot of numbers, so there's a massive breakdown next to the net worth section. What are all these numbers? That was like when we were going through each account. Just so everybody knows the file name on this is called, I WT conscious spending plan,

revision, oh three, first of all, I don't mind multiple revisions, that's totally fine.

Usually the first time people do a CSP, it's all wrong anyway. But at least it's a good start. It's just like drawing it in pencil, and then they go back and they fill in the colors and the lines, it's no problem. But now that we have this CSP with a lot of numbers, what are all these numbers I'm looking

Just to different accounts or properties.

So your assets you broke them down by car rental house, primary house, and the land. All right, let's go through it line by line. So Melissa, can you read the word in bold? And then the number in full next to each item all the way down for this box, please. Go ahead.

That's 1 million, 185,000 investment, 190,244 savings, 30,485, def, 800, 99,776. Total net worth, 96,553.

“96,000 dollars in total net worth, all right, what do you think about that number?”

It looks good on paper. Is there something else? Can I ask you to give me a direct answer? I noticed that this is a tendency you have. I ask you a question and then you tell me why it's going to be better later.

How was it doing the CSP? Well, we paid off $28,000 of debt, so it was good. Are you a house poor? Well, we need to pay off a house and then we'll be positive. I'm just asking you to answer the question directly.

Are you a house poor? I think we are right now, yes.

Do you find that sometimes you are always trying to look for the positive spin on something?

Yes. How do you think that that affects your money? Hold on, I can tell this is hard to think about, right? Take a second. We're in no rush.

Is it tough question? Take all the time you need the question was, do you often find yourself trying to put a positive spin on things? And the second I asked that I could see started to cry.

“Why do you think that was such a difficult question to hear?”

When we were taking care of my siblings, I couldn't go back to my parents to help. So I felt like we have to be strong and I just realized I was trying to do my story like a positive way. I can understand why you do it. The idea that we can't even think about something negative.

There's too much going on. We just have to focus on the positive. But I also noticed that in order to be able to fix our money problems, we actually have to be honest. Like are we in a bad situation because we have $899,000 of debt?

We need to be honest about that. Are we house poor? We need to be honest about that. It doesn't mean you're a bad person if you're honest about the situation that you are in.

But I can tell you it's very difficult to move ahead if you are always spinning something

to be positive. What do you think? Because I think this is helping me try to be unrealistic. Great. That's a good word.

Realistic. Realistic doesn't mean good or bad. Realistic just means we accept reality. And then we can decide if we want to keep it or change it. I like that word.

Okay. So are you house poor? Yes. All right. So you have $960,000 of net worth in your 30s.

But you're house poor. Tony, what do you think about these numbers? The net worth number? I think it's a good number.

“I think if we focus on a plan that could take us a long way, I feel like the years”

that we have worked so hard, it's paid off. All right. Is it good or bad? $960,000 net worth? Good.

Okay. What do you say, Tony? For me is amazing. All right. That's good.

Let's keep going to the income. This time Tony, I want to ask you, if you can read off your combined gross monthly income. What is that number? $15,830, which means combined the two of you make $189,000 a year. Did you know that?

And you are part, I think Tony's part is still wrong. Should we figure it out? All right. Who makes $9,630 a month? I mean.

That's you. Okay. And who makes $6200 a month? That's Tony, right? Yes.

All right. Tony, is that number right or wrong? It's correct. What do you do for a living, Tony? I managed a dental office.

Okay. All right. Melissa, why do you think that number is wrong? He just showed me his face up today, and it was more great. Get the paste up, Tony.

I love to roll on this.

So gross pay for the last couple of weeks was $3,400,8, and that paid $2,995.

I'm sorry to say, Melissa wins this one. Tony, your numbers are wrong. I don't know if you average it out, it's probably a little less. This was a good, a good paycheck. Oh, you get extra sometimes?

Yeah. If I work more hours. It's not that far off. We're like 600 bucks off gross. So you probably worked some extra hours, and normally you'd get a little bit less.

Fine. Melissa, are you okay with that? Putting $6200? Yeah. All right.

I think the number is probably correct. I stand corrected, Tony, you're right. You might have made a little bit of extra money, but in general, for just pure what we're going to assume, $6200 a month gross, fine. Do you combine your money or no?

No, we haven't. Not currently. No. Let me guess. You haven't sat down to do it together.

Never. Never. Why not out of curiosity? I guess we just got used to the idea of you take some part of the bills, and you pay the other half, and then whatever.

Let me guess without even looking. Let me just guess. Tony pays the rent or the mortgage, Tony pays car, Melissa pays everything for the kids, groceries, Amazon. How am I doing so far?

Pretty accurate.

“Why is it that every man and woman breaks down their expenses the same way?”

Why? And all of you are wrong. Watch this.

You're about to have a second kid, right?

Yeah. It's happening, like, in a matter of weeks, who's going to pay for all the kids' stuff now? Still mom. Mom's expenses are going to go way up, formula or food, all kinds of clothes, and all

gadgets, everything. How old care you're not going to adjust for it, because you don't sit down and talk about your expenses. Is that fair? It's obviously not fair.

No. You've been more money back and forth to each other? It's a sell payment, so if I'm running out of money, I just sell their old, I need $1,000. You literally sell requests to her $1,000, and then what do you do, Melissa? I have transfer of $1,000.

All right. How often do you do this on a given week?

Very first of the month, so the bills are right, but the same time.

Wait a minute. Hold on. Maybe this is just my automation brain thinking, because I don't like doing work, and I definitely hate logging into my bank.

“If it's always $1,000 on the first of the month, why not just set that up to do it automatically?”

Because someone say, I could pay it, and if I don't need to answer for money, I don't do it. Because I rather not. You guys like this, the asking for money transferred back and forth? No, because the renters give me the money, and I've been telling Tony, if you ask them

to give you the money, then you have the rent, but I mean, we're trying to merge. Why are you trying to merge now? Because it has been very unorganized. And then when we realized we had even more investments so we thought, and then when we realized we had $4,000 that we didn't even knew we had, then it's like, we need to put everything

into one bus. Okay. It's kind of funny to me that couples will have a baby together, but they won't combine their money. Combining money into a checking count, oh no, that's too intimate.

I go, let's just put the f*** together. We live together. We got a baby together. We got 20 houses together, but not combining income. My goal by the end of our call today is to convince you both to show you a reason why it

makes so much more sense to put your money together. Would you be open to that? Yes. Yes. Okay.

Great. Let's continue down the list here.

“By the way, $189,000 of household income, what do you think about that income?”

Is that good? Bad? What? Yeah. Tony?

Great. Yeah. It's pretty high. It's a lot of money. $189,000 and you're in your early 30s?

Yeah. I mean, we started working a year ago. Really? Working three years? How did you do it?

How did you make $189,000? I have these Twitter commenters leaving me these rabid comments and then they're telling

Meanwhile, the two of you, making almost $200,000 in eight years. How did you do it? We're very disciplined. Yes. I would work in the morning and then at night.

I love it. I wish every person watching this and listening to this understands what it's like to really work hard. I really wish. You know, I don't know.

No, I don't actually think everyone should have to work seven days a week. I don't want that kind of life for everybody. But I think there's a time in a place where you just say, damn, we got to work. Oh, it's Saturday and we're going to work. Oh, it's Sunday.

Okay, maybe we'll go in our later, but we're going to work. I wish everybody could see what it takes to work really hard. And I honestly, it's quite inspirational to see eight years and you're making $189,000 a year. It's really impressive, thank you.

Can we just acknowledge the dangerous narrative in America right now around immigrants? The idea that they're committing tons of crimes and they're taking our jobs and draining our resources. Not only is it wrong, it's just stupid.

“The truth is immigrants are the reason that this country continues to grow.”

Over the past decade, nearly all job growth in the United States has come from immigrants. And right now, we are the only developed country that has managed to keep growing. Not because we're special, but because we are a country where immigrants are woven into our country's very origin. Until this administration, Americans' views of immigrants were the highest on record.

And we actually have an amazing infrastructure to welcome immigrants from around the world.

Do you know the other countries are not so lucky? Japan, Korea, China, they are facing serious demographic collapse. Their birth rates are falling, their populations are aging fast. And without young workers to support them, their economies are in serious trouble. They're actually no easy solutions for those countries.

But America has been able to avoid that and thrive because of immigration. So when someone complains about immigrants, they either don't know the facts. For example, they don't know that immigrants commit less crime than native-born Americans. Or maybe, just maybe, they're deeply uncomfortable with people who don't look like them. I am unapologetically pro-immigration.

We need far more immigration because immigrants are one of the main drivers that make America a thriving country. I want to share that with you because this is not a show, merely about someone's freaking conscious spending plan. This is a show about living a rich life and you cannot ignore the context of how we talk

about money and immigration and politics in this country. After this, we'll get back to the numbers.

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“Can we continue on with the rest of the numbers here?”

I'm very curious to look at them. A couple, making a 1809K, what does the rest of their CSP look like? We're about to find out. Your fixed costs are 68%. That's kind of high.

It's not the worst, but I'd like to see that number below 60% and I'm a bit alarmed because with such a high income, your fixed cost should not probably be 68%. So we'll dive into that. Your investments are zero, oh God. That's not good.

These are 23%, it says that you are saving $3,000 a month for vacations, but then next to it, it says not saving using credit cards. What does that mean? Why do you both smiling like that? I think we're trying to say it was Fender.

You spend $3,000 a month on vacations a year. A year? Oh, and then you put it in savings. Why did you do that?

“Yes, I think we were just very confused.”

All right, let's fix it. It's okay.

Like I said, nobody gets it right the first time.

So you're not spending $3,000 a month on vacations.

“You're spending $300 a month on vacations.”

Is that right? Yeah, if you're divided, you. Yeah. All right, that's good. That actually changes things a lot.

So then that means you got zero going to savings and 32% going to guilt free spending or $4,100 a month. I don't believe that number either. No. Where's the money?

Well, I pay a credit card every month. How much? But it was my whole paycheck. So $4,000. Oh.

So you basically take all the extra money and put it towards the credit cards.

Yes. All right. What about you, Melissa? What do you do with your extra money? Well, we've been trying to pay enough of the credit cards.

If we look at your CSP, it says to me, under debt payments. That says that Melissa is paying $1,405 per month towards credit cards. Is that right or wrong? That's one of them. It's the one from the new construction, the remaining $4,000 from $2,223.

Okay. So the $4,100 a month roughly, you're putting it all towards credit card debt. Yes. All right. Let's take a look at the debt just so I understand it.

So your debt of $899,000, I'm going to read off what it's broken down into. So you have lows at $5,827. You have a mortgage at $520,000, primary house at 278,000, mx at 38,000. Bank of America at 45,000. And then it just says, Tony at 12,000.

What is that personal loan? Chase credit card. Okay. That's in red. It says $101,776.

You have $111,000 in credit card debt? Yes. What do you think about that number? That's really high. Melissa?

Yes. What do you think? Extremely high. Not necessarily. How do you get the debt so high on your credit cards?

Everything is good stretch. So are these good investments? Well, if you look at it from having to pay credit card debt and interest, no. What do you say, Melissa?

“That's what we want to, just that we have real estate properties.”

Well, you have a lot in Cabo. You have a primary house in a rental house.

The total of those is about $1.5 million.

And if you have $899,000 of debt, could you not just technically just sell one or two or three things you own and then just pay off the debt and be debt free? That's what I want. Yes. That's what Tony wants.

Melissa, what do you say? I think it's a good start to make that shift and don't plan any more projects. All right. This all seems a little too easy. Doesn't it?

Oh, no. We have all this debt. Switching to our back pocket and pull out one of our multiple properties and just sell it. Abracadabra, problem solved. All right.

That was a little convenient, but let's consider how they got here and what that means for you. Melissa and Tony haven't ever agreed on what the next logical financial step is. In fact, Melissa will say that they've made a decision and then that next week, Tony will backtrack and change his mind.

If I ended this call right now, I can guarantee nothing would change. But because the debt is not actually their problem, their individual relationships with money are. If you keep finding yourself in a similar pattern with your partner, you're constantly spinning in circles, you're making decisions only to have nothing change, then I want

you to check out my money coaching program. It is frustrating to be stuck with money, but you can get unstuck. In money coaching, I'll help you learn the skills to figure out how to make a plan, how to talk about money, how to build a system that makes you move forward. Go to iwt.com/moneycoaching to join now.

“Back to Melissa and Tony, remember they haven't even combined their money yet.”

Listen to how disproportionate their fixed costs are. A couple of things I want to note on your CSP, Tony, your fixed costs are at 97%. So what that means is, Tony, you're paying 97% of your take home pay is going towards fixed costs. You take home $5,800, you're paying all the mortgage, $2,600, you're paying utility, $730,

you're paying all this stuff.

So you have basically no money left over at all.

Right. Basically, I just keep a couple hundred dollars in my checking account. What does that feel like? It feels like I don't live paycheck to paycheck, I don't feel like I'm making any money.

Melissa, what do you think about that?

“I think that's why we should have measured finances.”

I agree. Daycare is $960 a month, is that going to go up with the new baby? Yes. Double. It'll double.

How are you going to pay for that? We haven't thought about that yet. Wait, what are you going to think about the baby's coming? Sometimes I talk to parents and they're like, yeah, we're going to have a baby in like five years.

Sometimes I talk to them and they're like, oh, we just find out we're pregnant. Oh, congratulations. This baby's coming. This baby's knocking on the door. Hello, world.

Where's my daycare? Right now. We don't have to worry about that until like, January. All right. How often do you think far ahead with your money?

Like over one year. I never think about it. A year in advance. I was, you know, as soon as the money comes in, that is worry about paying the bills. Yeah.

And I don't even have time to, to make a plan or a strategy. Okay. Melissa. I think it's just when we had like life changing events or having a baby siblings move out that kind of thing.

The reason I ask is that like, if you are not planning for what to do about child care and the baby's really coming soon, that to me is a big clue that you probably don't think about money down the road. If you're not even thinking about childcare for a baby, which is definitely going to affect your finances in a big way, then it's probably unlikely that you're thinking about things

like retirement or putting money aside for an emergency fund or vacation, things like that. And from what I'm hearing from you, that's probably true. Okay. So we probably need to change that because if we end this call right now, I suspect you will go the rest of your life, just getting into debt, making a little bit of money over

here, paying it off, going into debt, doing it over and over until one day, it's like you're in the ocean and it just engulfs you. That's it. Do you know anybody who's done that, they just go their whole life, just trying to pay off one thing and fix another and make some money and then keep doing it forever?

My mother. My parents, until they elose their houses on 50, and now you're both repeating the same pattern. I changed. Okay.

“Tony, what do you remember about growing up with money?”

What did your family say about money when you were young?

My dad was never around, so my mother took care of me and she always, you know, tried

to her best to provide for me, pay for my education, spoil me whenever she could, you know, buy me gifts, there was no really knowledge of, this is the money you can use to save, there was always like, almost live in paycheck and running out of money and then just working again to make more. What did she say about money, what phrases did she use?

I've never really talked about money with her. She's still alive? Yes. How's she doing with money now? Struggling?

She lives with one of her friends, they share a house, so they just split the rent. You ever talked to her about money now? No. Because I know there's, I mean, if she lived their whole life like this, why would she give me a buy now, right?

What message do you think you learned from your mom about money? I think I just learned, you know, you get up, work and figure out a way of surviving, Melissa,

“what do you remember about your family saying about money when you were young?”

We didn't talk about money, but when we started like 11 years old, every time I thought I would sit us down and make a list of why we don't have money and why we couldn't afford these things.

It was weird because we never had any extra money, but we went to good schools with scholarships,

but even if I asked for shoes, it was like a big explanation or analysis of, we're going to get them next month because these are my expenses this month and kind of think. Ah, so he would tell you all the things that he had to spend money on for the family, and that's why you can't get your shoes right now. So was he using his explanations to teach you about money or was it a way to not spend money

that he didn't have? What was it? I mean, at that time I was young, like 11/12, so I feel like he was just the bottom line was, you're not getting the 10 years until next month or we can afford that or it's your sister's turn or is that a good lesson or a bad lesson?

You could have teach me different things, maybe that's why sometimes I didn't even ask

“him, I started selling things like I would say, I would say, I'll in high school, accessors”

for the hair, and then every day I run out of them, so then I bought more and then sell them and then I could not ask for money. That's pretty resourceful. And then like the university, it was like, he didn't want to pay for it, but then I could earn a streaming scholarship, like 80%.

So then I was like, okay, 80% like, can I go? I end up going and graduating. Did he pay the 20%? Yes. Okay.

That's interesting. What happened then? So then in Mexico, the pay was very low and that's when I met Tony and he was moving to the United States and then I was like, well, I have a green car. I can work there too and then we move together.

When we move here, it's just seems so easy to make money. Uh-huh. Like, in our countries, you make $500 a month. And then here is like, we could be withress and make that in three days. Yeah.

Hold on. Here in this country, you're making 9,630 dollars in a month. That's a great lesson. What else did you learn? Well, I felt like maybe this is wrong, but I'm sitting down and running numbers with my

dad was sometimes on my perspective pointless because he was more light. So this is why we cannot do that. Right. Yes. That's a very good insight.

So your dad was basically Mr. No, he's saying no all the time.

So when you ask him for something, you start to be like, oh, God, he's going to get, put me through this rig and we're all of listening to all these numbers. So I don't want to run the numbers. And who is Mr. No in this relationship? Don't you?

Yeah. And so neither you wants to run the numbers. Tony, you're not actually talking about the numbers. Well, let's say you're like, oh, I want this. It's going to be good.

Tony's like, no, that feels bad. And that's the extent of that conversation.

“Do you notice the thing that happened with your dad around college?”

You asked him to pay for college. He said, no, then you got a scholarship. And you tried to persuade him to pay that last 20%. I think you do the same thing with Tony. Hey, here's this project.

I think we should do it. It's going to be great. We're going to make a lot of money. Tony's like, no, you're like, ah, Mr. No, I don't care what he says. Let me just convince him.

Finally, he goes, all right, like, I don't make as much money as you, so fine.

And then the two of you are not actually connected with money. Is that accurate or not? Yes. Yes. It also gave me into this situation where I need to stop making all these projects.

Because the way I show him is like, I can work more to keep going. You're onto something. But now we're to keep, I don't want to keep working. They're hard. Both of you are used to working a lot of hours.

Oh, we're short on money. We're going to go work. That's what you do. Five days a week, seven days a week. That's what you do.

Who cares if it destroys your body? That's what you do. You now have a second child coming. And you're doing all these projects. And it's actually unclear if these projects are making money or not.

And you factor in the credit card debt and all this other stuff. Some might make money. Some might not. But it's all locked up. But this idea of just let's just grind and let's just hustle more.

It works until it doesn't work. Yes. Kind of interesting. What are you both noticing about your stories about childhood versus how you treat money today?

Well, I feel like she picked up this role of kind of being my parent. Yeah. How would you describe it? Like what's an example where she feels like the parent when it comes to the finances? Since she makes more money than me, she kind of has the right to make big decisions.

Yeah. I think that's one way.

“And even transferring you money every month, you have to ask her, "Please, can I have”

some extra money? Please?"

And then she always does it.

So that's not the issue. But just having to ask as an adult when both of you are making money, it doesn't feel good. Melissa, do you agree there's a parent-child dynamic here? Yes, probably.

But I feel like I wanted to merge her finances a long time ago, but then she doesn't do it. Really? Now I like it.

I didn't expect that. What happened? It procrastinated a lot. Like you could be, "Yeah, let's do it."

But then it's like a week passed by then we just never end up doing it.

Why is that Tony? I've just come to board. I don't like changes. Like if I have one bank account, that's where the money's coming out from. And I don't want to go through all the process.

I guess just write it as procrastination. I mean, if you don't want to change, then I can't help you do it. There's no magic, Abra Cadabra thing I can say that's going to make either of you want to change. It doesn't exist.

If you are comfortable and you like it, what am I going to do? If you want to change, I can help. If you're unsatisfied with the way money is working in your household, I can help. If you can't open up an account that you yourself agreed to do, there's nothing I can do about it.

“Yeah, that's why I want to make this change and follow through and just make it happen.”

What's an example of a recent money change that you have made and followed through with? On my end, I haven't done anything. So why would we expect that you're going to do anything and follow through? Because I want to, to what's right for our marriage and our life together, what do you think Melissa?

We feel like sometimes it's easy things that he just make it sound so difficult to change the out of payments or the bill sound. Like I think that it's just easier than what he thinks in his mind is so difficult to change. Yeah, it makes a lot of sense.

So how do we get through this? Because truthfully, I don't love lecturing people. What do you think is really going on here? If the two of you zoomed up and you looked at the two of you right there down there, you're floating above yourselves and you looked at the two of you talking to each other and this

conversation, what would you notice about this conversation?

That we can come with an agreement and that I always think of ways to try to get out

of it. Yep, just to avoid the conversation and just don't do it. What about you, Melissa? What do you notice? Things that could be fixed if we can just, like really do it or follow the plan, like

even the bank accounts, like I close all my bank accounts and just leave the one we're going to merge. So I feel like I do my part, then I just need him to do his part to, like, merge that change your direct deposit, you already did mine, I already transferred everything to savings so then you do that set up too.

What if he doesn't do his part? Well, then I'm alone with one checking.

“What's going to happen to him if he doesn't do his part?”

Why would he change? I mean, it is going to avoid him asking every month. He comes every month, he goes, hey, can you charge me $1,000, and then what do you do? It's transferring him. Yeah.

What's the problem? Yeah, I don't know where else I could do. Ask him. Turning, can you finish the set up or merge accounts and change your direct deposit? Yeah, I actually want to commit to doing what's right and making the change and not thinking

twice about. Thanks. I don't find it very convincing. You know why? You've been married seven years.

You haven't even gotten around a combining your income. Come on. This idea of, like, we need to sit down and commit, it's just words. And that's actually not really the problem. There are people who are, like, I need to work harder.

You guys work harder. If somebody asks you, how do you work harder, how do you motivate yourself to get up at the morning and go to work? What would your answer be? This, please.

Obviously, you're very disciplined. I totally agree. But financially, maybe not so disciplined. Right.

“So, if somebody asks you, how do you get motivated to go to work every day?”

You seem so disciplined. How do you do it? What would your answer be? Exactly. It's like, if I were you, I'd be like, that's kind of a dumb question.

What do you mean, how do you get up and go to work? Go to work. That's what you would do. It's a weird question. And so, the same thing is true for money.

If you're here saying, like, oh, I just need to finally buckle down and do my money.

This is just weird words. There's actually something much deeper going on here. Perhaps the idea that Tony likes to avoid money, Melissa wants to be in charge because ever since she was a kid, she felt like she had to be in charge of money. Now, especially added on with the consideration that she earns more money than Tony,

Melissa has these big plans.

I need to do this deal and that deal and I always need to have something positive going

on. We can't talk about the debt, but let's just focus on the next gig and the next deal. And Tony, I know you're going to say no, because you always say no. You're the no guy. But I'm going to convince you anyway.

So just keep the money coming and I'll pay you the $1,000 to figure it out. But like, you know, it's fine. This house is going to sell and that that land is going to sell and then we're going to be all fine. How much of that's going on here?

Everything's true.

“Melissa, what do you notice about what I just said?”

And everything is a good idea, but it's not like it's on the air. It's in the air. Yes, there's no numbers guiding it. It's just like, oh, I think we should do this. I feel we should do that.

Yes, what else? Who's in charge? Think either of us. That's an interesting comment. What do you think, Tony?

Yeah, I think we just leave everything to we'll see what happens. And nobody's in charge. Wow, I kind of would have guessed Melissa's in charge, but I actually think your answer was better. Melissa, I agree.

No one is really in charge. Melissa, you persuade Tony to do the things you want to do even when you get $80,000 over budget, Tony, because you're kind of like, oh, whatever you want to do, Melissa, whatever,

then when things go wrong, you're like, well, I didn't even want to do it in the first place.

“What the fact is neither of you are actually creating a vision, and you are certainly not bringing”

the other person on board. Like it would actually be easier for one of you was just the boss, and you're just like, do these things, employee. I don't want that, but that would actually at least be a little more logical right now. It's like, I don't know, maybe we should do this, but then if it goes bad, I'm not involved

etc. The way we learn about money does not disappear just because we move to a new country. What's interesting to me is that Melissa and Tony have managed to do quite well financially. They have a high income and a solid net worth, but in my opinion, they have gotten here despite how they manage money.

They don't talk about money, they don't run the numbers on these huge purchases of buying and flipping and selling with no clear plan. There hasn't really been any strategy. There's been a lot of hard work, but also candidly, they've also gotten lucky. There's this phrase, I would rather be lucky than good.

Not me, luck is nice, but I never want to depend on luck for the important things in life,

like money. So I think it's great that they've gotten lucky, but luck doesn't last. I need them to understand a simple way of looking at money, and that's going to start with them understanding the risk that they have put themselves in. If nothing changes for you, in the next 90 days, what will happen?

We will probably run out of savings and have no money for an emergency fund, and then keep living paycheck to paycheck and run out of investments and hopefully we're on the surdubs. And if you do, we'll lose a house. We just trash eight years of work.

Why would you let yourself get in this position? I guess, because we thought we were doing the right things, making the right decisions. Yeah, I think it was my positive, like everything's going to go as planned, and not really saying the risk, but now that I'm tired, because I'm going to have another kid, then it's like, this is not a working, like when you two sail and start over with a new plan.

I think the new plan has to involve both of you. It has to involve serious numbers, not just feelings, and it has to be something that is sustainable. It cannot be one hustle after another. The hustle and the grinding that works when you're in your 20s, your single, you can

work extra, no big deal. We need to be smart now, and not just count on working in extra 10, 20, 30 hours. That does not scale. It doesn't work after a certain point. Tony, are you okay with that?

Yes.

“What would each of you need to change in your role with each other?”

Well, I think my mentality is staying more positive and does follow through. Maybe not. I'm going to give you a little bit of suggestion. I think one of the reasons that you go back and forth back and forth is that you're actually not really making a decision, you're just arbitrarily being like, yeah, we should do that,

or no we should do that. So when you just pick something based on how you feel based on where the sun is in the sky today, then the next day you're going to feel differently about it. Maybe you slept poorly or maybe you drank a can of coke, it doesn't matter. Real decisions for money are made based on numbers.

So if the person comes back and they start doubting you go, well, hey, maybe you're right,

We made this decision based on these numbers.

Have the numbers changed? Is there something that's changed differently? If not, why would we keep changing our mind? We already made a good decision based on the numbers.

“That's how you make effective decisions.”

So I think Tony, you're going to have to become proactive, meaning not wait for Melissa to come up with an idea. You need to be an equal partner in this. And you need to actually start using numbers. Have you read my book?

No. So how could you be a partner if you haven't read my book? Well, I want to now. I want to get involved. Good.

Melissa, how will your role have to change with Tony? I think I need to let him be more proactive and do this idea to me instead of me trying to convince him of my ideas. Maybe just listen more of his side of view, stop these real state things. Yes.

And that him really just take care of everything. Maybe be more involved. No one's taking care of everything. Both of you are going to be involved, but he should take care of some of the things I agree.

Yes, more involved. Yes. But in an active way, not in a, yeah, we'll see if it's self. No, no, no, no, no. I don't allow in decision in my financial relationship with my wife.

Never, like, let me put it this way.

What's this phrase? Some, there's some phrase about wealthy people. Touch once, deal with once or some, I don't know. The idea is basically, if we're going to talk about something, we're going to talk about

“it once and unless it's something really important, it's done.”

Like, hey, do we need to wash this towel? Because we have some guest coming over, talk about it once, deal with it once. It's over. That's it. We're not going to let's string this thing out because we got more important things

to deal with. Same thing with money. Oh, we need to open up a separate account. Okay, who's decision is it? Oh, Tony, you're going to be the one in charge of it.

Okay, Tony, one's going to be done. Tony says it's going to be done by next Tuesday. Okay, make sure you update the document. We're not talking about it again. And you make sure that the next time you talk about money, you can check in on those things

so you are monitoring. But Melissa, I can see you getting a little nervous. Like, how do I know he's going to do it? Do I trust him?

He never did it in the past, et cetera.

Tony, how do you want to respond to that? Well, I want to show her that I can't do it and I will do it. Cool. Maybe some good suggestions might be that each week, you each put an hour on your calendar

“to work through the money items that you need to work on.”

And then, during that time at the last five minutes, you can update a little document for each other, or you can even just sit next to each other and tell each other what you accomplished. Right now, you need to start with baby steps. Over time, you can expand your level of trust knowing that Tony has shown you, he will

follow through and Melissa, same thing for you, knowing that you will follow through as well and show Tony that. How does that sound? Great. Yeah.

Sounds like a plan. All right, what's the rich life vision for the two of you? For the next five years, what is a rich life look like? My idea is to travel at least once a year to a different country when my family. Okay.

So, I would like to not have any projects, and also I want to optimize all these monthly savings investments, so it's automatic and we don't have to uncalibrate like every six months, but just optimize everything. Great. So, you want to automate everything, you want to pay off the small half of these

house. Oh, okay. It's possible. All right. What about these babies?

Anyone want to include them in the rich life? These babies are just sitting alone for the next five years. You're like, "Ah, they're more fun when they're five. I'll pick them up then." What about them?

I mean, they're part of us. That's the way I see it, like, don't go, I don't know, with us. Okay. That's actually a pretty good answer. Just so everybody knows it's like a lot of cultural nuance in what Melissa just said.

The idea that they are part of us, they come with us. There's a lot of cultures where the adults do what they're going to do and the kids come with the adults. Like, the kids are going to fit into the adult lifestyle in America. It's like quite the opposite.

The idea is, "Oh, my God, we had a kid now we can spend every waking hour entertaining them and doing what they want to do. We're going to go to all the kids' shops, et cetera, and know we can't take them to an adult restaurant because that's not for kids." That's quite interesting.

Is that how it is? Melissa, the way you think about your kids? Yeah, I just take them with me everywhere I go or it's easy for me to take out the kids.

It was harder to raise teenagers than babies. Yeah. Okay, cool. I love that. I love that.

Sometimes just a subtle cultural differences that come out when people talk, I just love it. It's just a phrase you said, but it's so profound in the way that I'm guessing that you relate to your kids. That's really cool to be able to share a little bit of that.

All right. So you're going to bring your kids wherever you go, traveling, working, et cetera.

“Is there anything about the debt in this rich life?”

Uh, we don't want to any debt. You want to pay off your debt within five years? Yes, if it's not sooner.

Like I wish next year because we never had debt until we decided to build.

All right. Should we take a look at the CSP? I'm going to ask you, now that you have both described your rich life to me, I'm going to ask you what changes you want to make on the conscious spending plan. So we want to pay off old credit cards, lows, okay?

I'm an ex-banker from America, Antones. Okay, that's $101,000. Where's the money coming from? From Kabul. Okay.

That's $240, okay? Is that how much you're going to make? Yes. And you're going to have that soon, right? It's on the market now.

You're closing this month. Great. All right. So you're going to walk away after all fees, taxes, everything with $240,000. Yes.

Great. All right.

So you're going to pay off the credit cards.

That's amazing. How much do you have left in debt after that? $100,000. Okay. $800,000.

So what are you going to do with the extra $100 and however much thousand from your lot? Well, I would like to start on the emergency fund. Good. Why?

Just so I'm going to listen to those. I want to see how the two of you talk about this money. Well, I want to start on the emergency fund because anything gets happening if you lose your job and I'm stuck with maybe in the only head of a household. We need to have at least six months to be prepared and see where we get what our next step

is going to be. And now that we're going to be foreign to family, we need to take care of our two sons. Wait, Tony, one of the things that happens with the two of you when you talk about money is each of you just says something and then you just stop talking. It's not actually a conversation.

Have you noticed it? Tony's just like, I want to have this because this, yeah. And it's like very unclear what is supposed to happen next. Are you asking me a question? Are you telling me something?

Am I supposed to cry? What the hell is happening right now? So I need you to continue and then like a conversation.

What would you say on a first date?

Oh, so what do you think?

“That's how I need you to talk about money.”

Look at this. Look at the way that you're both sitting when it comes to money. Look, look. Hello, everybody. I am nervous about money.

I need you both to sit up straight, lean forward and get in the (beep) game. Let's do this. Go ahead, Tony. Tell her what you want to do and then get her involved. Okay, I want to open an emergency fund,

or at least to have at least six months worth of expenses. And I want to not have any credit card debt. And the rest of the money invested long term and not touch it. And now worry about it, if it's going up or down

and does because system with the monthly investments, what do you think? I agree, because we don't know why it's going to happen next year. Wow, good. Okay, I love it. I don't know why I'm getting so mad as I'm saying I love it,

but I (beep) love it, that was really good. Do we all just agree on what to do with $140,000? That sounds pretty good to me. Yes, damn.

“I think I'm just like, I think I'm shocked right now.”

This is working, okay. The debt's getting wiped, the credit card debt. All right, goodbye. The mortgages are still gonna be there for $800,000, roughly $800,000.

In terms of the extra $140K that's going into savings, that's a lot of money, my friends. That's more than six months. Six months would be like $48K. You're still gonna have like $115,000 or something on top of that.

You could invest. You could keep a little extra money in the savings account. You go, hey, our jobs are volatile or, you know, who knows, we want a little extra. It doesn't have to be six months.

Make it 12 if you want, that's fine. But you could also pay off your mortgage, depending on your interest rates. You could invest it. There's lots of options,

but it's good to really think about the entire gamut. What do you think? - As I well, I would like to separate some of the savings.

would it make a difference?

I don't know. We can research that. - I mean, it's like what helped.

“No, that's not how we talk about $50,000 decisions.”

No, (beep) Wait, I like what you said, Melissa, we can research it. Tony, how come when she said we can research it? Your answer was, oh yeah, it actually sounds pretty good. Let's do it.

Research, yes, making random decisions for $80,000. No, we're not gonna do that. Try that conversation again, please. - Maybe we should research how we can put like 80 or $50,000 towards the mortgage to see if we will help make a difference.

We can research that 'cause I don't know how it works. - Yes, I think that's a good idea.

And I'm sure it will help us, you know,

paying out the mortgage faster. So, I think that's a great idea. Good job. Who's doing the research together? Both, okay, cool.

One thing that couples unconsciously do is, when they're not used to being decisive, they use we, when they don't want to assign anyone to do it. Don't, I like we, when we're talking about we are making a decision together, that's great.

But we, the grand we who doesn't actually do anything, we're not allowed to use that anymore. You see, they're you, or I will do it. Pick one. - I would like Tony to do it, 'cause he,

has the hard questions, and I feel like, I don't think about the negative parts. - Nice. So, okay, that's cool. So, Tony, are you cool with doing the initial research

on what would happen if you put $50,000 extra towards one of your mortgages? - Yes, I think that's a great idea. I'm gonna research and I'm gonna go through all the details and that will help us pay down the house

and we're gonna make it happen. - Good. You know, I will say if you didn't have this Cabo sale,

“how would you plan to pay off $101,000 in credit card debt?”

- We were willing to sell the other house earlier this year, even if we had to pay taxes. - You know, the way you're currently paying it off,

just month by month, you would actually never pay it off.

Did you know that? - Yes, I realized that when it seems like nothing changed. - Yeah, that's because interest on credit cards is really high. Even if you put an extra $900 a month towards that credit card debt,

do you know how long it would take you to pay it off? - Yes. - 20 years? - I was gonna say $8 or $7. - It's almost 19 years.

- Oh wow. - And you would pay over $400,000 in interest. It really speaks to the idea like, going and making these decisions without actually knowing your numbers, going $80,000 over budget.

All of the work you've been doing for a decade, and actually for the next 20 years would just vanish, because you did not sit down and run some basic calculations. When you make huge decisions, just based on what you're feeling and just what you want today,

trust me, somebody is making money and a lot of the time it's not you. You don't want that. You are so lucky that you bought this land in these houses when you did, but some of it seems like it's very good decisions

and your GC and all that stuff is great. There's also a lot of luck, and you cannot count on luck for the long term. - A thing we were really lucky in,

“that's why we, you know what we said down”

and thought about a whole process of us for the past seven years, it was like I opened that that we were able to do this money, but what happens if it would have gone a different way? - Yes.

- We probably would have been bankrupt to be honest. - That's exactly the right lesson to take away. It's like whole (beep) we got really lucky. We got lucky despite a series of questionable decisions.

We are so lucky, we should exit this as quickly as possible and completely change our strategy. Because if you did this today, you would be broke, dead broke. So I think it's awesome that you have the opportunity to sell this land, I think that's great.

I think the question of what do you do with this rental house, that's something you should actually consider and run the numbers, you might choose to keep it. You should probably run your numbers more carefully. How much is it costing us every single month?

How much profit are we making after all fees? Even the roof repair at 12 years from now. All fees, compare that to what we make more just putting it in the S&P 500.

Don't let the tail wag the dog. Meaning, don't feel like just 'cause you had this vision

“of having multiple properties that you have to.”

You might, a lot of people can do it. But I can tell you that if you choose to go the real estate route, you will need to become way more quantitative, way more. Buying it just based on arbitrary decision or like I see a value, but I don't know, you'll get washed out one way or another.

You don't wanna be a landlord. You don't, then why you even have this rental property? Well, I realize I have to rent it. So what are you gonna do with this property? I would like to sell it next year.

Okay, fine, how do you feel about that Tony? Oh yeah, 100% wanna get rid of it. All right, and then what are you gonna do, Melissa? Oh God, what are you gonna do after you sell it? Invest in, and we'll save you.

Oh, I thought you're gonna buy another property. No, I wanna stop. You're out, all right.

I learned in my business, I always modeled out like

bad, medium, good, and then when my business went down, it was so bad, it went way below what I thought bad was. So my lesson was, no matter how bad it gets, it can always get worse. This like such a horrifying lesson in life,

but it's actually a good lesson too, 'cause no matter what you think you can get, it might be 50% lower, or 50% lower than that, which would be horrifying. So I say that, not just as a joke,

but something to consider, timing matters, especially when you are selling, keep it in mind. I would like for the two of you to read both of my books. One, start with I will teach you to be rich. I want you to do a book club where the two of you each week,

you alternate on who is in charge of the chapter, and you read both read it and you take notes, and then you discuss. That will help you set up your money, it will help you make sense of these numbers,

and because you're gonna be paying off your credit card debt, et cetera, you're actually gonna have some extra money every single month. Well, you're also gonna have some extra expenses like child care, but you actually have the money

to cover it, you actually have the money,

“but you need to start using your money much more effectively.”

Because you're gonna sell the lot, you're gonna fill up your emergency fund, so you're not gonna need to save more money for that. That's amazing. You will want to put some money aside for certain things.

I want you to read my book and redo your conscious spending plan. Okay?

The second thing I want you to read is money for couples.

The new book I wrote for couples to talk about money. This is going to help you actually communicate about money, much more clearly. You know how we talked about how you spend a lot, like there's no decisions that get made?

That's out the door. From now on, crystal clear, it tells you the exact words to say, and then you all can make it happen. Would you be willing to do that? Yes, I feel like a relationship will be better.

“Sometimes I feel like this is an important topic,”

and Tony will take some leadership. I love that too. Beautiful. Tony, how about you? Well, I feel like for the first time we're a team,

and sorry, I really want to hug my boyfriend. Go ahead, Tony, we got all the time in the world. So yeah, I feel like we're a team and together, we're going to get through this, and we're going to move forward, and I actually being more comfortable talking

about our finances, and our future goals and family plans. I love that. I do think there's power in doing this together, definitely. Tony never cries, never. Wow, I really appreciate the two of you connecting over money.

You have some things to fix, there's no doubt about that. Some debt, some decisions that were maybe a little bit sloppy. We also have some stuff that's really good. High income, ability to pay stuff off, most people would love to be in that situation.

The thing is, you gotta do it together. I've changed the way that you talk about money. It's especially important to do it now as you go into this new chapter with the new baby. Think about what got you here, all the last eight years,

hustling, working seven days a week, grinding it out.

You actually accomplished some pretty amazing things.

Was that the kind of life you want in this new chapter?

And that will require change.

“It'll require talking about money differently, behaving”

with money differently, changing the way you feel about money. So that's why getting on the same page, reading some books together, sharing some of the work that you do is going to be a big, big difference.

We're going to get to their fall ups in just a second.

But I first want to acknowledge the courage that it takes for any couple to come on this show and speak publicly about these things. And it is incredibly intimidating for native English speakers. Melissa and Tony did it in their second language.

So massive compliments to them. Now I have to admit that this conversation was also hard for me. There are a lot of cultural differences that I'm not privy to. I don't know what it's like to grow up in Mexico. I don't know what it's like to grow up in the socioeconomic class

that they did. I don't know what it's like to be a first-generation immigrant who's responsible, caring for young siblings. So this is one of those conversations where we had a gap among all of us.

But I'm still glad that we talked. It gives me a lot of empathy for what my guess experience. On this podcast, I don't want to pick the easiest conversations. I don't want to pick the ones that are just guaranteed to go viral on social media.

I want to pick the most meaningful ones. And sometimes those conversations are really hard. They're messy. But I try to challenge myself.

“That's why I do live tours where I bring couples on stage,”

not knowing what they're going to say in front of a thousand people. Or having conversations with couples, where I don't fully understand their cultural context. Probably I'm getting 15% of the things that I said today wrong. That's OK.

I accept that. I hope my couples do as well. Despite those challenges, Melissa and Tony made real progress today.

They finally saw that hustling, the skill that got them here

and got them new footing in a new country can be a strength. But at a certain point, you've got to go beyond hustling. With a new baby arriving any day now, they have a chance to build a calmer, steadier kind of life. Obviously, they have the drive.

Now they have the chance to give their family the stability that they have been chasing all along. Let's check their follow-ups. Paramed, thank you for having us on your podcast. It really helped us a lot.

We in the books have also opened our minds. And every time it's easier to talk about money. So I just want to say that my biggest surprise during my conversation was that I really had these mixed feelings. And it was very hard for me to look at the real numbers.

And I always wanted to do like a next step,

biggest planet, taking risk. So I'm going to stop. That's my takeaway. And Tony's going to take the leadership now. But we're also going to talk about our future goals

without making new projects or crazy investments.

“Yeah, I think for me was that before it was very stressful.”

I had a fear of talking about money because I didn't have a plan. And now that we have the CSP and we have something a goal to work towards a film more comfortable is very nice to talk with my wife after reading the book.

And we have our goals for the future. And my biggest takeaway is I know you mentioned I needed to be more proactive. And the first thing we did is actually open up our joint checking account. So I don't feel anymore like I'm not having any money

on my account. Now we both have and we can use the same account to set up the recurrent payments for our investments, for our kids, our college fund, retirement account and savings. We're closing our lot in carbon 15 days.

So we're going to pay off all the debt. We did the new CSP, how it will look like. And our fixed costs, it's at 49%. And our free guild is 24%. So we have a remaining $5,500 that we're going to do.

So we're doing $500 towards our kids' college. We put in $1,000 towards retirement, combined. And $1,500 towards stocks. And $500 is setting aside for vacation each month. We also were able to code $1,000 from our fixed cost

by cutting 130 on phone. I post my gym membership of 175.

And groceries are needing out another 500.

So I think we're in a good track. We hope next year we're going to sell the big house to pay off the small house.

“So I think we'll be in the next chapter next year.”

So this is very exciting.

I don't feel stressed about having the baby anymore. And I think this has been great for our relationship, too. Yes, it's really, it's more like couples therapy also. So like I said on the podcast, I feel like we're a team.

We're working towards our mutual goal.

And we are going to make it happen. So thank you again so much.

“It really changed my mindset moving forward.”

And we have your book here, so. We have homework here to do. Yeah, we still have some homework to do. But we appreciate it. Oh, you're hooked.

Thank you. Bye-bye.

“If you want my help with your specific money questions,”

you can apply to be on this podcast at iwt.com/apply. Or you can become a member of my money coaching program, instantly at iwt.com/money coaching. In money coaching, you get access to monthly 90 minute group coaching calls with me. We go deep on a single money topic.

One that has been transformative to me. And you have the chance to ask me questions in our live Q&A. Plus, you'll get access to a community of other people like you who will inspire you and push you to live your rich life. Check out Money Coaching at idwt.com/moneycoaching.